New BP CEO Tony Hayward asserts that his company shines when it comes to finding oil and gas or amassing an impressive portfolio of energy assets.

Operations are another story. An explosion at its Texas City refinery killed 15 people. A corroded pipeline allowed oil to spill at the nation's largest oil field in Alaska. And design and operational problems have delayed getting key Gulf of Mexico oil platforms up and running.

In his first media interview since taking BP's helm six weeks ago, Hayward said he is committed to improved safety, a culture in which all concerned voices are heard and making good on promises of improved performance.

"The task is to restore confidence. It has obviously been a pretty challenging couple of years at BP," Hayward said in an interview at BP's U.S. base in Houston.

"You earn your reputation through performance, through being clear about what you're going to do and then doing it," he said.

Composed and confident, with an open-neck pink-striped shirt at the complex where few wear ties, the 50-year-old geologist outlined his vision for the London-based oil giant.

Abrupt resignation

Formerly head of BP's exploration and production unit, Hayward was announced as former CEO
John Browne
's successor in January, when Browne moved up his retirement by more than a year to July.

Instead, Hayward took the post last month when Browne abruptly resigned after acknowledging that he had lied to a British court about where he met a former companion.

Hayward said BP has learned from its mistakes and has embraced an extensive report from an investigative panel headed by former Secretary of State James Baker III as a road map for righting safety wrongs at U.S. refineries.

The company also aims to ensure that employees have the right skills to do their jobs and that operations that are down are restored, including half of the Texas City plant's capacity.

Investors and the Texas City community have heard such promises already. Robert Kessler, an analyst with Simmons & Co. International, said he's watching for action, not words.

"The jury is still out in the BP story from an execution standpoint," Kessler said. "We just need to see good intentions translate into results for the company."

Hayward said improvement efforts could take up to five years. But the Baker panel's report, which he called a "real gift for BP," can guide the company in setting a new benchmark for industrial safety.

He declined to comment on an ongoing criminal investigation by a federal grand jury in Houston related to the Texas City blast.

Hayward visited the Texas City facility last month and spoke to workers as he walked around the plant for several hours. "They really do think a lot has changed," he said.

But last week's electrocution of a contractor at the plant was a "vivid and tragic reminder" of how far BP has to go to improve safety in work that is inherently dangerous, Hayward said.

"It's the refining industry, so what?" he said. "We have to have a work environment where people don't get injured or killed, period."

It found that before the 2005 blast, BP focused more on personal safety — prevention of incidents like slips and falls.

Independent monitoring

As a result, BP gained false confidence about its process safety, the panel said, though it found no evidence that BP intentionally ignored operational safety.

"I think it's a mandate for change for me," Hayward said of the Baker report. "And we've taken it and we're going to implement it."

Last month BP took a first step the panel recommended, appointing an independent monitor to oversee other improvements. The monitor, Duane Wilson, is a retired vice president of refining, marketing, supply and transportation for ConocoPhillips, who also served on the panel.

The U.S. Chemical Safety and Hazard Investigation Board reached harsher conclusions after an exhaustive two-year investigation into the Texas City blast. Its investigators said budget cuts imposed in the years before the blast reduced attention to safety and laid the foundation for the tragedy.

Hayward acknowledged BP and its peers cut costs in the late 1990s and in the early part of this decade to combat low oil prices and sagging refining margins.

But he reiterated the company's position that no link exists between the cuts and the Texas City blast or the oil spill at Prudhoe Bay on Alaska's North Slope.

"We spent a lot of time looking at that and there is no way you can say there is a direct correlation," he said.

Dan Horowitz, spokesman for the Safety and Hazard Investigation Board, said investigators stand by their report.

"There was a clear linkage between budget cuts and inadequate investment and the serious safety lapses in Texas City," he said.

While Hayward disagrees with that finding, he said cutbacks in skilled engineers and other professionals in the same time period did lead to BP's problems with Thunder Horse, its ambitious oil platform.

Originally slated to begin producing up to 250,000 barrels per day — more than any other Gulf structure — in 2005, the platform has faced repeated delays.

Two of its four pontoons took on water during Hurricane Dennis in 2005, then corrosion problems on equipment at the sea bed pushed production to 2008.

Hayward noted that Thunder Horse, in 6,000 feet of water, was the highest pressure, highest temperature development undertaken in the deepwater Gulf when BP tackled it.

In hindsight, he said BP lacked engineering capacity to handle its scale and complexity.

"We set off on what was, for the oil industry, putting a man on the moon without really the engineering underpinning to achieve that. I think if you step all the way back, you'd say that's the real root cause of all the issues we've had at Thunder Horse," he said.

2nd platform delayed

The problems prompted BP to hold back on rushing Atlantis, its 200,000-barrel-a day platform in 7,000 feet of water, into production this summer. It is now slated to begin operation by year's end.

A key Thunder Horse lesson is the need to maintain engineering skill through down cycles of low oil prices and refining margins — not just when prices are high, as they are now, Hayward said.

Hayward said BP also is intent on restoring the Texas City refinery to full capacity.

Texas City, which can process 460,000 barrels a day, is at half capacity amid ongoing repairs and restarts after Hurricane Rita prompted its first complete shutdown in 40 years.

"They still have an enormous task to complete. We are rebuilding a refinery piece by piece," Hayward said.